Banks 'unintentionally' laundering money for marijuana & other drug sales. Fake websites set up to process the transactions for legal products to camouflage the illegal services.
DOJ & FTC teaming up to expose these transactions.
#ButNothingsHappening
fcced.com/banks-unintent…
DOJ & FTC teaming up to expose these transactions.
#ButNothingsHappening
fcced.com/banks-unintent…
The big players like Visa, MasterCard & American Express all claim they have no idea that their networks were being used in this way. They get their cut of the transactions either way so have no motivation to look closely or understand it. 
Of course, the weak link are '3rd party' processors who handle e-commerce from small time players to #SiliconValleyOligarchs.
This was the business of #Wirecard who managed to disappear more than $2B in this business until they collapsed under scrutiny several weeks ago.
This was the business of #Wirecard who managed to disappear more than $2B in this business until they collapsed under scrutiny several weeks ago.
FTC is attempting to determine which ones are trying to keep fraud off their networks, which ones are not trying & which ones are active conspirators with the crooks.
How big of a problem is it? DOJ's SDNY recently busted a group that laundered over $100M in marijuana proceeds using this method.
FBI is still investigating if the 2 suspects also worked with Wirecard.
If you're not familiar with this case it has caused major ripples across Europe into the ME & Asia. With the UK freezing all of the merchant accounts to figure out what was going on.
If you're not familiar with this case it has caused major ripples across Europe into the ME & Asia. With the UK freezing all of the merchant accounts to figure out what was going on.
https://twitter.com/DawsonSField/status/1279463697866522625?s=20
Estimates are that $500B is laundered every year using these third party processors for e-commerce. The major players used to process their own transactions, but found it more profitable & with higher plausible deniability to rely upon such vendors to do the due diligence. Or not
Even the big players like First Data are looking the other way & were forced to pay a $40M fine recently & turn over the #receipts.
This ties into the Backpage case where prostitution & sex trafficking was being camouflaged through false credit card transactions. The CEO plead guilty & appears to be cooperating by explaining how it was done.
Of course, the credit card companies want their cut of the money...
Of course, the credit card companies want their cut of the money...
Credit card companies have almost doubled their revenue since 2012 in this business. And they charge higher fees for higher risk customers, so it is very profitable to not notice the corruption right under their noses.
Besides they just pass on the costs of the fraud to legitimate merchants & customers when they get caught.
How do we wake people up? By exposing crimes that impact them every day & cost them money on everything they buy.
Works far better than crimes they don't see too closely.
How do we wake people up? By exposing crimes that impact them every day & cost them money on everything they buy.
Works far better than crimes they don't see too closely.
As long as you don't process more than one million dollars per year from each credit card company, they don't look too closely either.
The US Attorney for the Western District of Pennsylvania is currently prosecuting a big drug case based upon this process.
A few players have flipped in the scheme!
But of course the 3rd party processors all say they are committed to combating the illicit use of their systems...
Words are cheap though & shady transactions are profitable!
But of course the 3rd party processors all say they are committed to combating the illicit use of their systems...
Words are cheap though & shady transactions are profitable!
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